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tv   The David Rubenstein Show Peer to Peer Conversations  Bloomberg  June 28, 2017 9:00pm-9:31pm EDT

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what would you say this skill set was your brought, great intellect, great drive, great leadership? phil: all of that. david: let's talk about golf. phil: tiger woods you could see coming from way back. i woremichael jordan, if those shoes -- phil: you might. david: when you give a $400 million gift, you write a check? is it hard to do that? phil: yes. -- >> would you fix your tie, please? david: well, people wouldn't recognize me if my tie was fixed, but ok.
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just leave it this way. alright. ♪ david: i don't consider myself a journalist. and nobody else would consider myself a journalist. i began to take on the life of being an interviewer even though i have a day job of running a private equity firm. how do you define leadership? what is it that makes somebody tick? i have worn your shoes for many years, but finally get a chance to talk about them. when you first started the company in 1962, you knew nothing about shoe design. you did not know a lot about management, and you did not have any money, so today, the company billion,roughly $100 revenues of $30 billion, 62,000
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employees. youyou ever imagine when first started this company in the 1960's that it would be what it became? phil: sometimes i would get that question and i would say, we are exactly on plan. [laughter] phil: with you i can't be a smart -- david: i wasn't the first to ask that question? phil: it was a rise that nobody could see. when we started out, total sales were about $2 million. $2 billion, now we are $9 billion. we took advantage of the running groom which became a jogging boon which became a fitness boom. david: would you say it benefited from being a marketing company or a technology company or a culmination of both? we are aave said
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marketing company and product is our most important marketing tool. david: what would you say this skill set was the brought, great intellect, great drive, great leadership? phil: all of that. [laughter] david: in equal amounts? phil: if there is one thing, i have been pretty good at evaluating people. that was one of the things i wanted to get through and i hope did come through in the book, how viable those early partners were, my teammates. they were terrific. david: speaking of that book, here it is. , i must confess i did not know what a shoe dog was. it isin 25 words or less, somebody who really loves shoes, and that was me. i was a runner. are you really care about are the shoes, so that became important to me, and has been with me ever since. david: you are from oregon, and
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i read the first fossil of a shoe that ever existed is 9000 , came fromand it was oregon, said do you take that as a special sign that it was to start the company in oregon? phil: i have not thought about it that way, but i would take it. david: your father was a newspaper editor, and he told you he would not hire you. why wouldn't he hire you? phil: he knew me pretty well. the journal, which he was publisher of, he wouldn't hire me so i went across the street to the oregonian and got it and worked there for three summers. david: in high school, you are but where and ran, you a superstar athlete, average athlete, or what would you say? phil: i was a little better than average, but certainly not a superstar. david: you got a scholarship to go to to the university of
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oregon? phil: no, i did not. i was a walk on, or run on. fo d: your best time was 4:13. suppose i told you you could 3.56r built nike or run a mile? phil: i will take nike. david: ok. phil: but i did pause. [laughter] in threeu letter years, and after which you went into the army, after year and the army, you served in the reserves for a number of years. you went to stanford. how did you pick stanford for a business goal? phil: it was and is a good school. i got admitted. david: there was a class on entrepreneurship? phil: the professor was a
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dynamic professor and inspirational professor, and he had me write a term paper and you were supposed to attach yourself to a small business in the bay area or make up a small business, and he said, make sure you write about something you know, so most of my classmates wrote about some electronics project, which was beyond me, but i remember my old track coach and i was one of the guinea pigs, so i was aware of the process, and it did not make sense to me at the time that running shoes should be made in germany to which were dominating world markets, so i said they should be made in japan and japan can do to german shoes with they did to german cameras. i worked pretty hard on the paper, and the professor liked it. david: did you get an a on it? phil: i did. david: despite this great paper,
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no shoe company hired you, and then you didn't have the silicon valley venture capital world, so you went back home and became an accountant, is that right? is that exciting for you to be an accountant? phil: no, i didn't ever plan to .e an accountant for 50 years i talked to a lot of people about what i should do and i was kind of a finance major at stanford and they said you should get your cpa certificate. that will put a floor under your earnings comes of that's what i did. david: you went by yourself on a trip around the world? with anothered out guy, but then he got waylaid by a girl in hawaii. i went on alone. david: when you were in japan, did you not stop in to see a shoe manufacturer? phil: that was part of the idea inspired by the paper that are wrote that i would call on
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japanese shoe manufacture to see about importing their shoes in to the united states. i called on one and they were enthusiastic, so it began. david: you started shipping shoes to a company called blue ribbon? where did blue ribbon come from? phil: first place. david: so they started shipping you shoes. your job is to sell the shoes. you had a green valeant and you would put them in the trunk and go around the track meets and sell the shoes, is that what you did? phil: that's what i did. david: you had no vision of building a great global company phil:. i thought it was the start and we could be bigger. nobody expected it to be as big as it is. some point they began to be competitive with you, so you begin to build your own company called nike, and you needed a symbol and somebody came up with this swoosh.
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you pay $35 for that? phil: it was a graphics arts student, and she's spent 17.5 hours on that. david: some $35, that's pretty good. phil: it did have a happy ending. when we went public we gave her 500 shares of stock and it is worth over $1 million right now. david: did you actually designed the shoes yourself or were you the person who figured out what the shoes were going to look like? phil: we were in a hurry. they asked john kennedy had he a hero, he said it is easy, thank my boat. --
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that gave us an idea that we may be better change manufacturers, so we were in a hurry. were in anhoes office in japan over the course of the weekend. david: if you have better shoes, can you run faster, or it does not make that much difference? phil: i think shoes are key. we still believe it makes a difference. a mile and ato run pair of dress shoes, you will not run as fast as you do in four ounce cleats. in the old days, we had a lot of canvas upper training shoes. you go out for a six mile run and you come back in your feet were bloody, so it matters. david: the dominant companies -- adidase dissent, and puma. phil: they didn't worry too much about us until it was too late.
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we kind of snuck up on them. david: and basketball come you have someone named michael jordan, who you've heard of, right? phil: when we started making shoes, we made them really dramatic. we ran a big ad that said band in the nba, and every kid wanted to shoot them. [laughter] david: when you wear his shoes, do jump higher. i wouldn't jump higher? phil: you might. david: i might go get some. ♪
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david: there was a university over oregon runner, steve prefontaine, a legendary track star, and you became close to him.
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how did you get him to wear your shoes? phil: we worked at it, worked at it, work at it. he had worn adidas his whole life, but he was right there in eugene, and we had a small office in eugene, and the guy who ran the office became his brother practically and ultimately convinced him to switch to nike, and he was our first roll prominent track and field athlete. david: you win after others. you have to pay them to use your shoes or they just like it so much they use your shoes? phil: they just like it so much. david: really? phil: no. [laughter] phil: they demand an endorsement fee from us or whoever. the one that comes to mind is michael johnson at the 1996 olympics in atlanta, the gold shoes which lifted us significantly. david: you made those shoes?
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mcenroe, he would from time to time loses temper, and with that reflect poorly on your shoe? this image was a great tennis player, but sometimes he would lose control, some people might say, and that did not bother you, or did it help sales? phil: the latter. david: oh, it did? phil: he had a bad temper. arnold palmer had a bad temper too, but he would keep it in control. you could see him standing there ready to lose it. john went over here he was arnold palmer who did not keep it in control, but he was probably the most exciting player of his era. perfectte, he was a gentleman, but so intense that it would get away from him sometimes. he lost his temper a lot, but when he played bjorn borg, he never lost his temper once.
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david: i never really knew john mcenroe as a tennis player, but when i practice law, the office next to mine was held by man named john mcenroe senior, and he always said his son was a high school tennis player, but then i finally realized he was not exaggerating. [laughter] talk about golf. a man named tiger woods came along and you signed him up relatively early in his professional career, so was that hard to convince him to do this? phil: tiger woods, you could see him coming from way back, three u.s. amateurs in a six-year span ,rom the time he was 15 to 20 so he would play occasionally in the portland area and we would always invite him and his father out to lunch, so we were working on that for three years before we sign him. david: when you signed him up, he wears your shoes exclusively,
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but then you begin to make golf you make as well, so golf balls and golf equipment, but now you are out of that business. is that because you want to focus on shoes and not other types of equipment? phil: it is a fairly simple equation. we lost money for 20 years and we realize next year would not be any different. david: so you got out of that. phil: you are doing casual wear as well, the aerobics effort, casual wear. you have decided to make athletic shoes into a casual shoes, did that work as well? , shoes andtswear clothing is still a significant part of our business. you now try to design shoes for people who are wearing them casually, so you like it when people are wearing suits and your shoes as well? phil: they look great. david: do you wear anything other than nike shoes? phil: no. david: you wear a tux eat or
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something and you where nike shoes? phil: black nike shoes. , you havebasketball somebody named michael jordan as a basketball player, you've heard of, right? was it hard to sign him up, and why was his shoes so successful, the most successful shoe ever and the athletic world phil:? it was hard to sign him up because everyone wanted him. we won that war. david: was it on your personality? phil: clearly. david: not money, just personality? pretty good.red we had a lot of good players. we did not have great players, and we thought he had the chance to be that he was obvious he way better than we could have imagined, but when he started wearing shoes, we made them , and he wasd, black a very exciting player. he was quick, shot, jump,
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handsome, spoke well, and the shoe was distinctive looking and david stirred did as a huge favor, he banded in the nba. and so we ran a big ad that said "band in the nba" and every kid one of the shoe. [laughter] david: michael jordan has not played for more than a decade and the shoe is to your best-selling basketball shoe, why is that? phil: we were selling $700 million worth of jordan products when he retired. it has now become a brand and we billion, butver $3 some kids don't even know who he was. it went from an endorsement into a brand. david: when you wear his shoes, do jump higher? if i wore the shoes, i would not jump higher, right? phil: you might. david: i will go get some. when you realize you can't take
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it with you and it is better to give it away? phil: it was late in the process because i kept thinking it was all going to disappear. i'll reset if this is a dream, don't wake me. david: when you give a 500 mile -- five in a million-dollar gift, and you write a check out? is it hard to give that money? phil: yes. ♪
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david: you are one of the
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wealthiest men in the united states and the world, and also one of the biggest philanthropists. when did you realize you just can't take it with you and it is better to give it away? at what point do you say i have to do something with this other than hold onto it? it was fairly late in the process because i always thought was going to disappear. i often said if this is a dream, don't wake me. as the years went on, it seemed more real, so as i got older, i said to me can take it with you, but i wanted to focus on three-four main charities. david: to the university of oregon, you have given a couple of hundred million dollars but $500o athletics, million recently for a science center, so why so generous? phil: basically, i have to laugh because two of the great
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entrepreneurs, bill gates and steve jobs, basically dropped out of college when they were freshmen, and my story is exact opposite. the company nike is the result of tubing universities, the twoersity of oregon -- universities, the university of oregon and stanford, so i tried to get back to those two schools. the other when the means a lot , which has an outstanding leader in their cancer research area. david: the oregon science health 500ersity, you gave them million dollars for cancer -- the ohs you night shu knight center. some of it has been given
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in stock and some paid out over several years. have two sons, one died tragically in the scuba diving accident. how have you tried to memorialize him in that way? he was a big sports fan, so gave some money to the university of oregon for the new basketball arena, which was named after him. david: today, what is left for you to accomplish and what haven't you accomplished? phil: i look back and am happy particular round the philanthropy and what i've been able to do, but i take my time to think about those things and i'm feeling good about things right now. david: do consult with your wife on things like that? phil: absolutely, she has final approval. david: where did you meet your wife? phil: she was one of my students. david: she was a good student? phil: she was a better student
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than i was. david: it is unrealistic to make these kinds of products in the united states, shoes and those kinds of things? we speak, but manufactured technology is changing very rapidly, so 5-10 there will be shoe manufacturing in the united states, which is good news. the bad news is there will be a lot of jobs. it will be automated. david: he never actually hurt your knee so much, you don't have artificial knees or hips, so how did you avoid those problems by running so much and not having damage your body, you were just a graceful runner, or the shoes? phil: i don't have very much muscle mass, so i was lucky that way. i still get out and walk. out for one of my runs, capacitor woman and a baby carriage and realize that maybe i should quit trying to run and just walk.
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you havee athletes met, you have been involved with some of the most famous athletes, tiger woods, john mack and row, steve prefontaine, michael jordan among others, are any of them that stand out to you as role models for youth, or do think all of them are, and which of them have you develop the closest personal relationship with? phil: they are all of that bit different. was john mcenroe a role model? yeah, kind of, but a lot of people would disagree with that. which one stands out more than the other -- i really do look at the mess my children, and who is your favorite child, you can't say that. david: does tiger woods give you golf tips, or you don't play badly,.il: i do, he tried to give me a tip, but it didn't work. david: the high point of your career was when nike went public
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or the success it currently has? what would you say is the most favorite memory you have? phil: i look at nike as my work of art, and the whole painting is what matters. david: let's talk finally about leadership. leadership is not clear to people, whether you are born with it or become a leader by education. what you think makes a great leader? phil: they come in all shapes and sizes, don't they? , tall, handsome, strong-jawed, but a lot of times just the opposite. first of all, they have to want it, but they come in all shapes and sizes. david: now you are famous for wearing sunglasses, and i appreciate you not wearing them for this interview.
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is that because you are shy by nature or you don't want people to see you? brighthe future is so that i wear them all the time. [laughter] ♪
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♪ there we go as we prepare for the arrival of xi jinping. the first visit as a precedent to the territory, marking 20 years since his hand over from britain. that's what we have at the moment. digestingve markets and wall street and big moves there, technology coming back, and digesting what the central bankers have been saying as well. i am rishaad salamat broadcasting from bloomberg's asia headquarters. i am haidi lun in sydney.
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we are seeing financials carry on from that extended rally in wall street. what -- parsing what the central banks had to say, the boe there. we are taking a look at the shanghai and hong kong markets just kicking over to the open. shery: a pretty good start for the markets in china. the hang seng index gaining .7%, and you mentioned tech shares leading the gains, up 1.4%. the only sector losing ground is energy, although oil prices are gaining for a fifth consecutive session. regulators will start looking into that sell off of some small s we saw earlier in the week, 17 companies losing 40% of